It isn’t hyperbole to describe this past week as significant or even a turning point for the African startup ecosystem. The obvious reason would be the successful initial public offering of Jumia (more below) but it’s bigger than Jumia and it had started to turn since the second half of 2018.
Jumia may or may not represent the greatest of financial boons for a majority of African investors (though South Africa’s MTN is still its largest shareholder—for now). But getting the IPO off the ground represented a coming of age for a sector which for the biggest capital markets and investors in the world had often been made to seem like a well-intentioned but fanciful ideal. That was particularly clear for those of us with the perspective of both worlds.
I often tell the story of a seasoned US tech investor and long-time contact who on learning we were starting Quartz Africa asked if there was any African startup worth investing in back then in 2015. I suggested a few names to explore including then African Internet Group, now Jumia. At the time it might have seemed like too much effort for too little if you’d just been investing in Alibaba or something at that scale. Also, no one, especially investors, likes to be first and the lack of an obvious likely exit was also a challenge. That was also likely discouraging for many big name African investors invited to back local startups.
You could make a good case that that changes now. Arguably, as suggested earlier, it’s already changing.
Already in the first quarter we’ve had two nine-figure funding later stage funding rounds with Andela’s $100 million Series D in January and this week fintech player Branch’s raised $170 million in a debt and equity Series C round. Depending on whose numbers you use African startups raised between $700 million and $1.2 billion last year.
The pipeline of well-run businesses is improving to attract funds as we’ve discussed previously but also interesting is new funds being created to target later stage African startups and they’re moving well beyond the experimental, impact-only five-figure grant model which was perhaps necessary to get things started in many African markets five to ten years ago.
It’s worth noting a turning point does not mean it’s all plain-sailing from here. We’re just on to the next stage. The bar is raised, the standards will need to get higher to justify the bigger checks and tougher due diligence. This is a good thing, it’s not supposed to be perfect but it’s progress.
— Yinka Adegoke, Quartz Africa editor
STORIES FROM THIS WEEK
Ghana’s president wants to make French a formal language, but it’s not a popular plan. Since coming to office in 2017, Ghana’s president Nana Akufo-Addo has pushed for Ghanaians to learn French and one day make it the country’s official second language. But, as Kwasi Gyamfi Asiedu reports from Accra, Ghana isn’t quite ready.
Ethiopia’s reformist prime minister faces another tough year in office. In the 12 months since he came to power, premier Abiy Ahmed has introduced seismic political, economic, and social changes aimed at reshaping Ethiopia. However the 42-year-old leader faces a slew of challenges that could define whether his reforms succeed or fail, writes Abdi Latif Dahir.
Congo Brazzaville’s ruling family allegedly laundered millions through a Trump luxury condo. A luxury New York apartment is raising questions about the Trump Organization’s ties to international money laundering. An international investigation alleges the daughter of the president of Congo Republic bought a $7 million condo in the Trump International Hotel & Tower in New York with stolen government funds.
Sudan’s longtime ruler has finally been deposed. After months of protests and social media shutdowns, the three-decade rule of Omar Hassan al-Bashir ended on Thursday after the military removed himfrom office and placed him under arrest. While local protestors pushed the hand of the government and military to acquiesce to their demands, Isma’il Kushkush explains the crucial role the diaspora played in toppling the 75-year-old leader.
Black students’ suicides on a South African campus show the toll of ignoring diversity. Black students demanding change at the University of Cape Town set off a chain of events that showed a political strength, but it took a toll on their mental health, a new report shows. Living in poverty on a campus where a racist culture left them feeling isolated all led to a spike in suicides, writes Lynsey Chutel.
How Kenya lay the foundation for WikiLeaks and Julian Assange’s global, anti-secrecy agenda. The founder of WikiLeaks Julian Assange was arrested this week on charges that he helped hack US government computers in 2010. Yet long before his and the web organization’s global fame, the prophet of leaks traveled to Kenya and helped expose corruption and impunity.
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CHART OF THE WEEK
Jumia, the largest e-commerce operator in Africa, took off like a “Rocket” on the New York Stock Exchange. Jumia’s anticipated billion-dollar initial public offering in New York launched with strong interest as the stock closed up 75% of its first day of trading. The launch, which was delayed by a day, marks a landmark first for African tech startups. Jumia’s strong first day performance is in line with projections by veteran investors with experience in backing e-commerce companies from emerging markets.
OTHER THINGS WE LIKED
Lagos is a place with open eyes. A decade before the American Civil war, James Churchwill (“Church”) Vaughan set out to fulfill his formerly enslaved father’s dying wish to leave his home in South Carolina for a new life in Africa. The Southern Baptist man ended up in 19th century Lagos and built a remarkable life as chronicled by Lisa A. Lindsay for The Metropole.
Cheap antibiotics are fueling deadly drug-resistant infections in poor communities. Unable to afford full medical care, residents of the slum communities in Kibera, Nairobi head to their local pharmacy to buy affordable generic antibiotics usually from China and India. For the New York Times ($) Andrew Jacobs and Matt Richtel find the increasing use of these drugs is leading to the antibiotics losing their ability to kill the germs they were created to beat.
Master’s scholarship in data science-related programs. The Carnegie Corporation and the African Institute for Mathematical Sciences (AIMS) are inviting final-year undergraduates and post-graduates interested in data science and related disciplines to apply for one of its six Masters by Research scholarships or its four PhD scholarships at the Quantum Leap Africa (QLA) Research Center in Rwanda. More information here. (First deadline end of April).
African studies fellowship. The “Africa Multiple” Cluster of Excellence at the University of Bayreuth (Germany) invites scholars with PhDs working in the field of African studies to apply for fellowships in the Bayreuth Academy of Advanced African Studies. Apply here.(Apr. 30).
KEEP AN EYE ON
Very Young Entrepreneur Education & Acceleration Summit, Johannesburg (Apr 15). Educators, investors, entrepreneurs and other stakeholders from across Africa will gather for the inaugural summit in Johannesburg. The one-day conference is an initiative from the organizers of Anzisha Prize in partnership with Mastercard Foundation.
Ivanka Trump to visit Africa (Apr. 14-17). The head of the US agency for international development will accompany Ivanka Trump to Ethiopia and Côte d’Ivoire to promote global women’s economic empowerment.
China-Africa research conference (Apr. 15-16). The 5th annual China-Africa Research Initiative at the John Hopkins University in Washington DC will discuss Sino-African technology and skills transfer.
*This brief was produced while listening to Petit Pays by Cesaria Evora (Cape Verde) whose remarkable life, music and the long-lasting impact of her legacy on the island country is featured in Quartz Africa this week.
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, Jumia IPO day shares and Ghanaian French lessons to firstname.lastname@example.org. You can follow us on Twitter at @qzafrica for updates throughout the day.